Soundboard Association v. Federal Trade Commission
United States Court of Appeals for the District of Columbia Circuit
888 F.3d 1261 (2018)

- Written by Rich Walter, JD
Facts
The Federal Trade Commission (FTC) (defendant) regulated the telemarketing industry. A segment of the industry used a technology known as soundboard. One such soundboard user, Call Assistant LLC, wanted to know whether a particular soundboard technique fell under a certain FTC rule. FTC regulations provided a procedure for requesting a ruling from the FTC’s commissioners. Call Assistant could have resorted to that procedure. Instead, however, Call Assistant asked only for an informal opinion letter from the FTC’s staff. In 2009, the FTC staff issued a letter stating that, based on the information Call Assistant provided, the staff’s opinion was that the soundboard technique in question fell outside the scope of the FTC rule. In 2016, the FTC’s staff issued a second letter, stating that the staff had concluded that Call Assistant’s information was faulty and that, therefore, the staff planned to rescind the 2009 letter. Both the 2009 and 2016 letters pointed out that the staffers spoke only for themselves and not for the FTC commissioners. Soundboard Association (SBA) (plaintiff), which represented soundboard manufacturers and users, sued the FTC for violating the Administrative Procedure Act (APA). SBA alleged that the 2016 letter constituted a legislative rule issued without the prior public notice and comment that the APA required. A federal district court dismissed the case, finding that although the 2016 letter was a final agency action, it was not a legislative rule but was instead an interpretive rule to which notice-and-comment requirements were inapplicable. SBA appealed to the Court of Appeals for the District of Columbia Circuit.
Rule of Law
Issue
Holding and Reasoning (Wilkins, J.)
Dissent (Millett, J.)
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